1

A PROJECT REPORT

ON

CUSTOMER RELATIONSHIP MANAGEMENT IN

STATE BANK OF INDIA

SUBMITTED TO UNIVERSITY OF MUMBAI IN

PARTIAL FULFILLMENT

FOR THE REQUIREMENT OF THE DEGREE OF

M.COM-I

(BUSINESS MANAGEMENT)

SEMESTER 1

UNDER GUIDANCE OF

PROF.MR. S.N. CHITALE

VPM’S K.G. JOSHI COLLEGE OF ARTS

N.G. BEDEKAR COLLEGE OF COMMERCE THANE

ACADEMIC YEAR: 2014-15

ADITI H. HANDE

ROLL NO. 14

2

DECLARARTION

I Aditi Hande studying in M.COM-I (Business Management) hereby declares that I

have done a project on Customer Relationship Management In SBI. As required by

the university rules, I state that the work presented in this thesis is original in

nature and to the best my knowledge, has not been submitted so far to any other

university.

Whenever references have been made to the work of others, it is clearly indicated

in the sources of information in references.  

(Aditi Hande)

Place: Thane

Date:

3

ACKNOWLEDGEMENT

It gives me great pleasure to declare that my project on Customer Relationship

Management In SBI have been prepared purely from the point of view of students

requirements.

This project covers all the information pertaining to Customer Relationship

Management. I had tried my best to write project in simple and lucid manner. I

have tried to avoid unnecessary discussions and details. At the same time it

provides all the necessary information. I feel that it would be of immense help to

the students as well as all others referring in updating their knowledge.

I am indebted to our principal Dr. Mrs. Shakuntala A. Singh Madam for giving us

such an awesome opportunity. I am also thankful to our co-ordinator Mr. D.M.

Murdeshwar Sir and also librarian and my colleagues for their valuable support,

co-operation and encouragement in completing my project.

Special thanks to Prof. Mr. S.N. Chitale my internal guide for this project for

giving me expert guidance, full support and encouragement in completing my

project successfully.

I take this opportunity to thanks my parents for giving guidance and for their

patience and understanding me while I am busy with my project work.

4

Sr No Topic Page No

Chapter1 Customer Relationship Management (CRM) 5-9

1.1 Introduction 5

1.2 Emergence Of CRM 7

1.3 Features Of CRM 10

1.4 Benefits Of CRM 13

1.5 Importance Of CRM 17

Chapter2 Customer Relationship Management In Banks 20-25

2.1 Introduction 20

2.2 Need Of Crm In Banks 23

2.3 Crm A Powerful Tool 24

Chapter3 State Bank Of India 26-30

3.1 Introduction 26

3.2 History 28

Chapter4 Customer Relationship Management In SBI 31-40

4.1 Services Provided By SBI To Its Customers 31

4.2 Transaction Banking Unit 34

4.3 Rural Business Unit 36

4.4 Regional Rural Banks 39

Conclusion 41

Bibliography 42

CHAPTER 1: CUSTOMER RELATIONSHIP MANAGEMENT

5

INTRODUCTION

WHAT IS CRM

Every business unit emphasizes on spurting a long term relationship with

customers to nurture its stability in today’s blooming market. Customer’s

expectations are now not only limited to get best products and services, they also

need a face-to-face business in which they want to receive exactly what they

demand and in a quick time.

Customer Relationship Management is an upright concept or strategy to solidify

relations with customers and at the same time reducing cost and enhancing

productivity and profitability in business. An ideal CRM system is a centralized

collection all data sources under an organization and provides an atomistic real

time vision of customer information. A CRM system is vast and significant, but it

be can implemented for small business, as well as large enterprises also as the main

goal is to assist the customers efficiently.

The key drivers for a CRM programme within the public sector tend to be the

improvement of services to citizens, together with some real expectation of

improving the efficiency and the effectiveness of the organisation. Other drivers

could be to focus limited resources on those in most need or to maximize revenue

from customer facing activities.

At the heart of a perfect CRM strategy is the creation of mutual value for all the

parties involved in the business process. It is about creating a sustainable

6

competitive advantage by being the best at understanding, communicating, and

delivering, and developing existing customer relationships in addition to creating

and keeping new customers.

Definitions:

“An enterprise-wide business strategy for achieving customer-specific objectives

by taking customer-specific actions.” Peppers & Rogers (2004)

“CRM is a philosophy and a business strategy, supported by a system and a

technology, designed to improve human interactions in a business

environment.”Greenberg (2004)

EMERGENCE OF CRM

7

Customer Relationship Management (CRM) is one of those magnificent concepts

that swept the business world in the 1990’s with the promise of forever changing

the way businesses small and large interacted with their customer bases. In the

short term, however, it proved to be an unwieldy process that was better in theory

than in practice for a variety of reasons. First among these was that it was simply

so difficult and expensive to track and keep the high volume of records needed

accurately and constantly update them.

In the last several years, however, newer software systems and advanced tracking

features have vastly improved CRM capabilities and the real promise of CRM is

becoming a reality. As the price of newer, more customizable Internet solutions

have hit the marketplace; competition has driven the prices down so that even

relatively small businesses are reaping the benefits of some custom CRM

programs. Following explanation gives us the idea about emergence of CRM:-

In the beginning…

The 1980’s saw the emergence of database marketing, which was simply a catch

phrase to define the practice of setting up customer service groups to speak

individually to all of a company’s customers.

In the case of larger, key clients it was a valuable tool for keeping the lines of

communication open and tailoring service to the clients needs. In the case of

smaller clients, however, it tended to provide repetitive, survey-like information

that cluttered databases and didn’t provide much insight. As companies began

tracking database information, they realized that the bare bones were all that was

needed in most cases: what they buy regularly, what they spend, what they do.

Advances in the 1990’s

8

In the 1990’s companies began to improve on Customer Relationship Management

by making it more of a two-way street. Instead of simply gathering data for their

own use, they began giving back to their customers not only in terms of the

obvious goal of improved customer service, but in incentives, gifts and other perks

for customer loyalty.

This was the beginning of the now familiar frequent flyer programs, bonus points

on credit cards and a host of other resources that are based on CRM tracking of

customer activity and spending patterns. CRM was now being used as a way to

increase sales passively as well as through active improvement of customer

service.

True CRM comes of age

Real Customer Relationship Management as it’s thought of today really began in

earnest in the early years of this century. As software companies began releasing

newer, more advanced solutions that were customizable across industries, it

became feasible to really use the information in a dynamic way.

Instead of feeding information into a static database for future reference, CRM

became a way to continuously update understanding of customer needs and

behavior. Branching of information, sub-folders, and custom tailored features

enabled companies to break down information into smaller subsets so that they

could evaluate not only concrete statistics, but information on the motivation and

reactions of customers.

The Internet provided a huge boon to the development of these huge databases by

enabling offsite information storage. Where before companies had difficulty

supporting the enormous amounts of information, the Internet provided new

9

possibilities and CRM took off as providers began moving toward Internet

solutions.

With the increased fluidity of these programs came a less rigid relationship

between sales, customer service and marketing. CRM enabled the development of

new strategies for more cooperative work between these different divisions

through shared information and understanding, leading to increased customer

satisfaction from order to end product.

Today, CRM is still utilized most frequently by companies that rely heavily on two

distinct features: customer service or technology. The three sectors of business that

rely most heavily on CRM -- and use it to great advantage -- are financial services,

a variety of high tech corporations and the telecommunications industry.

The financial services industry in particular tracks the level of client satisfaction

and what customers are looking for in terms of changes and personalized features.

They also track changes in investment habits and spending patterns as the economy

shifts. Software specific to the industry can give financial service providers truly

impressive feedback in these areas.

FEATURES OF CRM:

10

Customer Relationship Management is a strategy which is customized by an

organization to manage and administrate its customers and vendors in an efficient

manner for achieving excellence in business. It is primarily entangled with

following features:

1. Customers Needs- An organization can never assume what actually a customer

needs. Hence it is extremely important to interview a customer about all the likes

and dislikes so that the actual needs can be ascertained and prioritized. Without

modulating the actual needs it is arduous to serve the customer effectively and

maintain a long-term deal.

2. Customers Response- Customer response is the reaction by the organization to

the queries and activities of the customer. Dealing with these queries intelligently

is very important as small misunderstandings could convey unalike perceptions.

Success totally depends on the understanding and interpreting these queries and

then working out to provide the best solution. During this situation if the supplier

wins to satisfy the customer by properly answering to his queries, he succeeds in

explicating a professional and emotional relationship with him.

3. Customer Satisfaction- Customer satisfaction is the measure of how the needs

and responses are collaborated and delivered to excel customer expectation. In

today’s competitive business marketplace, customer satisfaction is an important

performance exponent and basic differentiator of business strategies. Hence, the

more is customer satisfaction; more is the business and the bonding with customer.

4. Customer Loyalty- Customer loyalty is the tendency of the customer to remain

in business with a particular supplier and buy the products regularly. This is

11

usually seen when a customer is very much satisfied by the supplier and re-visits

the organization for business deals, or when he is tended towards re-buying a

particular product or brand over times by that supplier. To continue the customer

loyalty the most important aspect an organization should focus on is customer

satisfaction. Hence, customer loyalty is an influencing aspect of CRM and is

always crucial for business success.

5. Customer Retention- Customer retention is a strategic process to keep or retain

the existing customers and not letting them to diverge or defect to other suppliers

or organization for business. Usually a loyal customer is tended towards sticking to

a particular brand or product as far as his basic needs continue to be properly

fulfilled. He does not opt for taking a risk in going for a new product. More is the

possibility to retain customers the more is the probability of net growth of

business.

6. Customer Complaints- Always there exists a challenge for suppliers to deal

with complaints raised by customers. Normally raising a complaint indicates the

act of dissatisfaction of the customer. There can be several reasons for a customer

to launch a complaint. A genuine reason can also exist due to which the customer

is dissatisfied but sometimes complaints are launched due to some sort of

misunderstanding in analyzing and interpreting the conditions of the deal provided

by the supplier regarding any product or service. Handling these complaints to

ultimate satisfaction of the customer is substantial for any organization and hence

it is essential for them to have predefined set of process in CRM to deal with these

complaints and efficiently resolve it in no time.

7. Customer Service- In an organization Customer Service is the process of

delivering information and services regarding all the products and brands.

12

Customer satisfaction depends on quality of service provided to him by the

supplier. The organization has not only to elaborate and clarify the details of the

services to be provided to the customer but also to abide with the conditions as

well. If the quality and trend of service go beyond customer’s expectation, the

organization is supposed to have a good business with customers.

BENEFITS OF CRM:

13

Excellent customer service is about being aware of customer needs and reacting to

them effectively. CRM can:

Develop better communication channels

Collect vital data, like customer details and order histories

Create detailed profiles such as customer preferences

Deliver instant, company-wide access to customer histories

Identify new selling opportunities

Following are some of the benefits of CRM:

1. Centralization and Sharing of Data :

With Customer Relationship Management (CRM) systems, data is stored in one

centralized location, making it readily accessible to all members of an business or

organization. This enables the company's staff to more easily communicate with

and market to their customers. If one sales person is on vacation, for instance, the

information about his customers is available to the entire sales team, and they are

able to pick up where he left off without jeopardizing a customer relationship.

2. Better Customer Service:

Customer Relationship Management (CRM) systems are capable of storing

detailed information about each customer, such as their history of orders,

correspondence, survey responses, and marketing emails. Having such information

easily accessible can significantly improve the speed and quality of customer

service. This in turn gives employees more time to focus on sales, marketing, and

other priorities.

3. Higher Customer Satisfaction:

14

Customer Relationship Management (CRM) systems make customers feel more

like they are part of a team than merely a sales statistic. This sense of partnership

often makes for a happier customer who is more likely to do repeat business and

refer a potential new customer.

4. Improved Marketing Efforts:

Records contained within a Customer Relationship Management (CRM) system

may be analyzed in order to more effectively market to each individual in a

company's database. Customer demographics, order histories, and survey results

may be studied in order to determine which group(s) are best to target in each

specific marketing campaign. Also, details about a customer's previous orders can

be used to predict when he is likely to place his next order, and what type of

products he is interested in ordering. Cross-selling and up-selling can also be more

effective when companies are equipped with this information.

5. More Profit:

The combination of more efficient customer service, more effective marketing,

happier customers, and more sales translates to a more profitable business.

6. Save Time:

15

A CRM automates a lot of the usual time-devouring tasks, giving salespeople more

time to do what they are actually paid to do: namely, sell to prospects. More time

spent in front of potential customers (instead of shuffling paper) means more sales,

which makes everyone happy.

7. Look Professional:

Which do you think looks better to a prospect: a salesperson who keeps all their

information in a computer database and can pull up vital details immediately, or

one who keeps their information on Post-It notes and has to scramble for ten

minutes just to find the scheduled appointment time?

8. Save Money:

Sure, the more impressively arrayed CRMs can cost a lot of money. But if you

don't need quite that much technology working for you, it's easy to find less

expensive or even free alternatives. And just think how much you'll save on Post-It

notes if you're putting all that information into the computer instead.

9. Convenient:

16

If the whole sales team is using the same CRM, then it's easy to share that

information as needed. Most CRMs allow you to develop templates for phone

scripts or frequently used emails, and the team can share these templates. Many

CRMs even support mobile devices, so you can access all that information from

your iPhone or enter a few quick notes right from the prospect's office.

10. Secure:

What happens when the nightly cleaning crew accidentally throws out someone's

Post-It archive? With a CRM, information is usually stored either in a central

database or in the CRM provider's system. At the very least each salesperson can

back up copies of their individual databases to another computer.

IMPORTANCE OF CRM:

17

Customer Relationship management is the strongest and the most efficient approach

in maintaining and creating relationships with customers. Customer relationship

management is not only pure business but also ideate strong personal bonding

within people. Development of this type of bonding drives the business to new

levels of success.

Once this personal and emotional linkage is built, it is very easy for any

organization to identify the actual needs of customer and help them to serve them in

a better way. It is a belief that more the sophisticated strategies involved in

implementing the customer relationship management, the more strong and fruitful is

the business. Most of the organizations have dedicated world class tools for

maintaining CRM systems into their workplace. Some of the efficient tools used in

most of the renowned organization are Batch Book, Sales force, Buzz stream, Sugar

CRM etc.

Looking at some broader perspectives given as below we can easily determine

why a CRM System is always important for an organization.

1. A CRM system consists of a historical view and analysis of all the acquired or

to be acquired customers. This helps in reduced searching and correlating

customers and to foresee customer needs effectively and increase business.

2. CRM contains each and every bit of details of a customer, hence it is very easy

for track a customer accordingly and can be used to determine which customer

can be profitable and which not.

3. In CRM system, customers are grouped according to different aspects

according to the type of business they do or according to physical location and are

18

allocated to different customer managers often called as account managers. This

helps in focusing and concentrating on each and every customer separately.

4. A CRM system is not only used to deal with the existing customers but is also

useful in acquiring new customers. The process first starts with identifying a

customer and maintaining all the corresponding details into the CRM system

which is also called an ‘Opportunity of Business’. The Sales and Field

representatives then try getting business out of these customers by sophistically

following up with them and converting them into a winning deal. All this is very

easily and efficiently done by an integrated CRM system.

5. The strongest aspect of Customer Relationship Management is that it is very

cost-effective. The advantage of decently implemented CRM system is that there

is very less need of paper and manual work which requires lesser staff to manage

and lesser resources to deal with. The technologies used in implementing a CRM

system are also very cheap and smooth as compared to the traditional way of

business.

6. All the details in CRM system is kept centralized which is available anytime on

fingertips. This reduces the process time and increases productivity.

7. Efficiently dealing with all the customers and providing them what they

actually need increases the customer satisfaction. This increases the chance of

getting more business which ultimately enhances turnover and profit.

8. If the customer is satisfied they will always be loyal to you and will remain in

business forever resulting in increasing customer base and ultimately enhancing

net growth of business.

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In today’s commercial world, practice of dealing with existing customers and

thriving business by getting more customers into loop is predominant and is mere a

dilemma. Installing a CRM system can definitely improve the situation and help in

challenging the new ways of marketing and business in an efficient manner. Hence

in the era of business every organization should be recommended to have a full-

fledged CRM system to cope up with all the business needs.

CHAPTER 2: CUSTOMER RELATIONSHIP MANAGEMENT IN

BANKS

20

Today, customers have more power in deciding their bank of choice.

Consequently, keeping existing customers, as well as attracting new ones, is a

critical concern for banks. Customer satisfaction is an important variable in

evaluation and control in a bank marketing management. Poor customer

satisfaction will lead to a decline in customer loyalty, and given the extended

offerings from the competitors, customers can easily switch banks. Banks need to

leverage effectively on their customer relationships and make better use of

customer information across the institution.

CRM IN BANKING SECTOR

Over the last few decades, technical evolution has highly affected the banking

industry. For more than 200 years, banks were using branch based operations.

Since the 1980s, things have been really changing with the advent of multiple

technologies and applications. Different organisations got affected from this

revolution; the banking industry is one of it (Sherif, 2002).

In this technology revolution, technology based remote access delivery channels

and payment systems surfaced. ATM displaced cashier tellers, telephone

represented by call centers replaced the bank branch, internet replaced the mail,

credit cards and electronic cash replaced traditional cash transactions, and

interactive television will replace face-to-face transactions (Sherif, 2002).

In recent years, banks have moved towards marketing orientation and the adoption

of relationship banking principles. The key motivators for embracing marketing

principles were the competitive pressure that arose from the deregulation of the

financial services market particularly in India. This essentially exposed clearing

21

banks and the retail banking market to increased competition and led to a blurring

of boundaries in many traditional product markets (Durkin, 2004). The bank would

need a complete view of its customers across the various systems that contain their

data. If the bank could track customer behaviour, executives can have a better

understanding, a predicative future behaviour and customer preferences. The data

and applications can help the bank to manage its customer relationship to continue

to grow and evolve (Dyche, 2001). According to Stone et al. (2002) most sectors of

the financial services industry are trying to use CRM techniques to achieve a

variety of outcomes. In the area of strategy, they are trying to:

Create consumer-centric culture and organisation;

Secure customer relationships;

Maximize customer profitability;

Integrate communications and supplier – customer interactions across

channels;

Identify sales prospects and opportunities;

Support cross and up-selling initiatives;

Manage customer value by developing propositions aimed at different

customer segments;

Support channel management, pricing and migration.

CRM is a sound business strategy to identify the bank’s most profitable customers

and prospects, and devotes time and attention to expanding account relationship

with those customers through individualised marketing, reprising, discretionary

decision making, and customised service through the various sales channels that

the bank uses. Any financial institution seeking to adopt a customer relationship

22

model should consider six key business requirements (Chary & Ramesh, 2012),

they are:

1. Create a customer-focused organisation and infrastructure.

2. Gaining accurate picture of customer categories.

3. Assess the lifetime value of customers.

4. Maximise the profitability of each customer relationship.

5. Understand how to attract and keep the best customers.

6. Maximise rate of return on marketing campaigns.

NEED OF CRM IN BANKS

Bank merely an organization it accepts deposits and lends money to the needy

persons, but banking is the process associated with the activities of banks. It

includes issuance of cheque and cards, monthly statements, timely announcement

of new services, helping the customers to avail online and mobile banking etc.

23

Huge growth of customer relationship management is predicted in the banking

sector over the next few years.

Banks are aiming to increase customer profitability with any customer retention. In

banking sector, relationship management could be defined as having and acting

upon deeper knowledge about the customer, ensure that the customer such as how

to fund the customer, get to know the customer, keep in tough with the customer,

ensure that the customer gets what he wishes from service provider and understand

when they are not satisfied and might leave the service provider and act

accordingly.

The present day CRM includes developing customer base. The bank has to pay

adequate attention to increase customer base by all means, it is possible if the

performance is at satisfactory level, the existing clients can recommend others to

have banking connection with the bank he is operating.  Hence asking reference

from the existing customers can develop their client base. If the base increased, the

profitability is also increase. Hence the bank has to implement lot of innovative

CRM to capture and retain the customers.

CRM-A POWERFUL TOOL

CRM is a powerful management tool that can be used to exploit sales potential and

maximize the value of the customer to the bank. Generally, CRM integrates

various components of a business such as sales, marketing, IT and accounting. This

24

strategy may not increase a business's profit today or tomorrow, but it will add

customer loyalty to the business.

In the long term, CRM produces continuous scrutiny of the bank's business

relationship with the customer, thereby increasing the value of the Customer’s

business. Although CRM is known to be a relatively new method in managing

customer loyalty, it has been used previously by retail businesses for many years.

The core objective of modern CRM methodology is to help businesses to use

technology and human resources to gain a better view of customer behavior. With

this, a business can hope to achieve better customer service, make call centres

more efficient, cross-sell products more effectively, simplify marketing and sales

processes, identify new customers and increase customer revenues.

As an example, banks may keep track of a customer's life stages in order to market

appropriate banking products, such as mortgages or credit cards to their customers

at the appropriate time.

The next stage is to look into the different methods customers' information are

gathered, where and how this data is stored and how it is currently being used. For

instance, banks may interact with customers in a countless ways via mails, emails,

call centres, marketing and advertising. The collected data may flow between

operational systems (such as sales and stock systems) and analytical systems that

25

can help sort through these records to identify patterns. Business analysts can then

browse through the data to obtain an in-depth view of each customer and identify

areas where better services are required.

CHAPTER 3: STATE BANK OF INDIA INRODUCTION

STATE BANK OF INDIA

State Bank of India (SBI) is a multinational banking and financial services

company based in India. It is a government-owned corporation with its

26

headquarters in Mumbai, Maharashtra. As of December 2012, it had assets of

US$501 billion and 15,003 branches, including 157 foreign offices, making it the

largest banking and financial services company in India by assets.

The bank traces its ancestry to British India, through the Imperial Bank of India, to

the founding in 1806 of the Bank of Calcutta, making it the oldest commercial

bank in the Indian Subcontinent. Bank of Madras merged into the other two

presidency banks—Bank of Calcutta and Bank of Bombay—to form the Imperial

Bank of India, which in turn became the State Bank of India. Government of India

nationalised the Imperial Bank of India in 1955, with Reserve Bank of India taking

a 60% stake, and renamed it the State Bank of India. In 2008, the government took

over the stake held by the Reserve Bank of India. SBI was ranked 285th in the

Fortune Global 500 rankings of the world's biggest corporations for the year 2012.

SBI provides a range of banking products through its network of branches in India

and overseas, including products aimed at non-resident Indians (NRIs). SBI has 14

regional hubs and 57 Zonal Offices that are located at important cities throughout

the country.

SBI is a regional banking behemoth and has 20% market share in deposits and

loans among Indian commercial banks.

The State Bank of India was named the 29th most reputed company in the world

according to Forbes 2009 rankings[4] and was the only bank featured in the "top 10

brands of India" list in an annual survey conducted by Brand Finance and The

Economic Times in 2010.

Non-banking subsidiaries

27

Apart from its five associate banks, SBI also has the following non-banking

subsidiaries:

SBI Capital Markets Ltd

SBI Funds Management Pvt Ltd

SBI Factors & Commercial Services Pvt Ltd

SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)

SBI DFHI Ltd

SBI Life Insurance Company Limited

SBI General Insurance

In March 2001, SBI (with 74% of the total capital), joined with BNP Paribas (with

26% of the remaining capital), to form a joint venture life insurance company

named SBI Life Insurance company Ltd. In 2004, SBI DFHI (Discount and

Finance House of India) was founded with its headquarters in Mumbai.

HISTORY OF SBI

The roots of the State Bank of India lie in the first decade of 19th century, when

the Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June

1806. The Bank of Bengal was one of three Presidency banks, the other two being

the Bank of Bombay (incorporated on 15 April 1840) and the Bank of Madras

28

(incorporated on 1 July 1843). All three Presidency banks were incorporated as

joint stock companies and were the result of the royal charters. These three banks

received the exclusive right to issue paper currency till 1861 when with the Paper

Currency Act, the right was taken over by the Government of India. The

Presidency banks amalgamated on 27 January 1921, and the re-organised banking

entity took as its name Imperial Bank of India. The Imperial Bank of India

remained a joint stock company but without Government participation.

Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve

Bank of India, which is India's central bank, acquired a controlling interest in the

Imperial Bank of India. On 1 July 1955, the Imperial Bank of India became the

State Bank of India. The government of India recently acquired the Reserve Bank

of India's stake in SBI so as to remove any conflict of interest because the RBI is

the country's banking regulatory authority.

In 1959, the government passed the State Bank of India (Subsidiary Banks) Act,

which made eight state banks associates of SBI. A process of consolidation began

on 13 September 2008, when the State Bank of Saurashtra merged with SBI.

SBI has acquired local banks in rescues. The first was the Bank of Behar (est.

1911), which SBI acquired in 1969, together with its 28 branches. The next year

SBI acquired National Bank of Lahore (est. 1942), which had 24 branches. Five

years later, in 1975, SBI acquired Krishnaram Baldeo Bank, which had been

established in 1916 in Gwalior State, under the patronage of Maharaja Madho Rao

Scindia. The bank had been the Dukan Pichadi, a small moneylender, owned by

the Maharaja. The new banks first manager was Jall N. Broacha, a Parsi. In 1985,

SBI acquired the Bank of Cochin in Kerala, which had 120 branches. SBI was the

29

acquirer as its affiliate, the State Bank of Travancore, already had an extensive

network in Kerala.

The State Bank of India and all its associate banks are identified by the same blue

keyhole logo. The State Bank of India wordmark usually has one standard

typeface, but also utilises other typefaces.

Other SBI service points

SBI has 27,000+ ATMs (25,000th ATM was inaugurated by the then Chairman of

State Bank Shri O.P. Bhatt on 31 March 2011, the day of his retirement); and SBI

group (including associate banks) has about 45,000 ATMs. SBI has become the

30

first bank to install an ATM at Drass in the Jammu & Kashmir Kargil region. This

was the Bank's 27,032nd ATM on 27 July 2012.

LOGO AND SLOGAN

The logo of the State Bank of India is a blue circle with a small cut in the

bottom that depicts perfection and the small man the common man - being

the center of the bank's business.

Slogans: "PURE BANKING, NOTHING ELSE", "WITH YOU - ALL THE

WAY", "A BANK OF THE COMMON MAN", "THE BANKER TO

EVERY INDIAN", "THE NATION BANKS ON US"

CHAPTER4: CUSTOMER RELATIONSHIP MANAGEMENT IN

STATE BANK OF INDIA

SERVICES PROVIDED BY SBI TO ITS CUSTOMERS

31

The vision statement unambiguously spells out the centricity of the customers in

the bank’s business strategies and operations. A multi-tiered structures of

committees constantly review existing services and suggest improvements.

Important issues raised by these committees and action taken thereon as well as

analysis of consolidated data for customer grievance for all circles are placed

before the customer service committee of the board every quarter, to identify

common systematic and policy issues that require rectification.

The bank has a well defined and documented grievance redressal policy which

provides for:

A dedicated customer care cell.

Banks web based COMPLAINT MANAGEMENT SYSTEM (CMS) has been

redesigned and launched as a single online GRIEVANCE LODGING AND

REDRESSING SYSTEM for the bank. Customers can lodge their complaints

through various channels including written complaint at branch by calling at toll

free number of bank contact center, online through bank’s website, sending

SMS message etc. all complaints are lodged through CMS and are

acknowledged with a unique ticket number immediately on lodging. Bank has

mandated and has been able to redress a majority of customer grievances within

a maximum period of three weeks of receipt as against the time limit of 30 days

prescribed in the BCSBI code. All ATM related complaints of bank customers

are redressed within the RBI prescribed 7 days.

While the bank strives to achieve the highest standards in customer service, it

has also put in place a board approved compensation policy to compensate the

customer financially in the unlikely event of any slippage in service extended.

The policy ensures that the aggrieved customer is compensated without having

to ask for it.

32

Over 70% of the recommendations of Damodaran committee have already been

implemented.

Suitable structure has been put in place at the Branches, Regional Business

Offices, Local Head Offices, Administrative Offices and at Corporate Centre of

the bank for handling requests and appeals under the RTI ACT 2005, Consumer

Forum, etc.

Customer friendly initiatives:

During 2012-2013, in the backdrop of slowing investment/consumption/net

exports, constrained food production, high inflation, distress in several industry

and infrastructure sectors-textile, chemicals, iron and steel, food processing etc

major initiatives were taken by banks towards catalyzing investment and growth,

to facilitate the flow of credit to critical sectors of the economy including

agriculture, infrastructure, micro, small and medium enterprise, housing and with a

view to reducing customer distress points and raising levels of customer

satisfaction. These initiative include:

Pricing concession :

Interest rate: base rate was twice educed during the year from 10% to 9.5%

in 2012 and then again to 9.70% as on 2013 the lowest amongst all banks

and so pegged to bring relief to all borrowers particularly SME units, home

loans borrowers, who continued to enjoy lowest home loan interest rates and

commercial real estate accounts.

Guarantee fees were absorbed by the bank both for exporters (ECGC) and

fees payable by MSE units to CGTMSE for guarantee cover on collateral

free loans upto Rs 1 crore.

Process innovations :

33

Relationship management platform was strengthened across business

verticals- accounts management teams for corporate, premier banking services

for high net worth customers, relationship managers for SMEs.

The number of processing cells, supported by loan origination software,

were increased and revamped, for quiker processing of loans.

Cluster models were introduced at all currency chest branches for efficient

cash management at semi-urban/rural areas.

A dedicated wing was created in all processing cells to monitor NPA

accounts.

Product change :

The inter-core transfer transaction have been made free and cash deposit

minimum charges were reduced from Rs 25 to Rs 10.

Personal Accident Insurance Policy was introduced for all saving accounts

holders at a nominal rate.

SBI loan scheme for Vocational Education and Training eas launched while

loan amount for studies abroad was raised to Rs 30 lacs.

Technology upgrades :

SBI through CMP centre was the first bank to use NPCI Adhar Payment

Bridge System (APBS) for transferring LPG subsidy based on Adhar

Number.

State Bank MobiCash Easy, a mobile wallet was introduced during the year.

E-challan cum return for collection of Employees Provident Fund through

branches and corporate internet commenced during the year.

The Bank issued a series of new plastic cards for the convenience of their

target groups eg:State Bank Business debit card for corporate customers in

two variant- Pride and Premium, Insta deposite cards enabling traders and

34

service providers to quickly deposite cash, State Bank Virtual Card for retail

customers.

TRANSACTION BANKING UNIT (TBU)

TBU oversees cash management products, trade finance and supply chain finance

and has expanded its activities during the last three years.

Cash Management Product (CMP) :

Collection services in the Bank are now offered through 1219 authorized

branches located at 722 centres. Besides usual cheques and cash collections,

Doorstep Banking for cash/cheque pickup and collection for public issues

(IPO) are being handled by CMP.

e-Trade SBI :

It is a web based portal to enhance customer comfort and provide easy

access to trade finance services, by enabling customers to lodge Letters of

Credit, Bank Guarantees and Bill Collection/ negotiation requirements

online from any corner of the world has been well received with 1326

corporates registered under e-Trade SBI and more than 11000 transactions

per month through e-Trade platform.

e- VFS (Electronic Vendor Financing Scheme) and e-DFS (Electronic

Dealer Financing Scheme):

These are fully operated and secured products, designed to ensure efficient

management of working capital cycle of the corporate and sustained growth

and profitability of business partners.

Financial Institutions Business Unit (FIBU) :

35

It is a dedicated vertical created for capturing potential business

opportunities from financial institutions, has been able to bring on board 15

insurance companies, 26 mutual fund companies, 45 NBFCs and 15 banks.

ATM Network:

State Bank of India has ATM network in the country, which has expanded

further during the year, to provide better ATM facilities to the customers.

As on No. of ATMs ATM

availability

uptime

No. of

transactions at

ATM (in lacs)

31.03.12 22141 95.15% 23811

31.03.13 27175 96.42% 29324

36

RURAL BUSINESS UNIT

Financial Inclusion :

Bank has set up 38,480 BC Customer Service points, through alliances both

at national and regional level.

SBI is offering various technological-enabled products, through Business

Correspondents (BC) channels, such as saving bank, RD, STDR, remittances

and OD facilities.

Opened 2.03 crores small accounts with simplified KYC.

Bank has covered 12,931 FI villages (population >2000) and 7600 FIP

villages(population <2000)

Transactions volume through BC Channels has grown 2.4 times during FY

12-13 at Rs13,033 crores over FY 11-12.

Around 99% households covered & 9085 lac accounts linked with Adhaar in

43 pilot districts.

Multiple IT enabled channels for Financial Inclusion include:

Kiosk Banking : The Bank’s own technology initiative, operated at internet

enabled PC(Kiosk) with bio-metric validation at 20,178 CSPs, covering 83

lacs customer enrolments, has been rolled out in 31 states and 479 districts.

SBI Tiny Card : About 14 lacs customers have been enrolled during FY13

(cumulative more than 76 lacs customers)

Mobile Rural Banking : Bank’s own technology on mobile platform

introduced. This technology works on even very inexpensive mobile

handsets.

37

Cell Phone Messaging Channels : This cost effective model, working on

low-cost simple mobile phones and well secured through PIN/ signature

based security has been rolled out in 12 states across 50 districts and covered

2025 CSP outlets.

Credit Flow to Agriculture :

The bank has disbursed loans aggregating Rs 63,936 crores in FY13

surpassing the annual GOI target of Rs 60,000 crores and 11.89 lakh new

farmers were brought into the bank’s fold during the year.

New Products launched :

The revised Kisan Credit Card scheme provides for comprehensive short

term credit limit, assessed for 5 years with 10% step up every year for past 5

years with 10% step up every year, with inbuilt post harvest/ household/

consumption requirement, maintenance expenses of farm assets, Crop

Insurance, Personal Accidental Insurance Scheme (PAIS), asset insurance

and investment credit. In addition, loan account is operated through multi-

delivery channels using State Bank Kisan Cards.

The new Tractor Loan Scheme was rolled out to cater to emerging needs with

relaxations in eligibility norms, margin, securities, coupled with competitive

interest rates and EMI mode of repayment.

Special campaigns were launched to accelerate agri-business growth:

‘Swarna Dhara Campaign’ for agri-gold loans was continued, with quarterly

competitions and garnered Rs 14345 crores business.

‘Tractor Carnival’ launched to regain the market share, resulted in a business

growth of Rs 328crores.

38

Growth enablers :

Corporate and Partnership Tie-ups: Bank has entered into 14 new corporate

tie-ups for driving growth, major being PepsiCo (KCC), Rallis India (KCC),

ITC Ltd (KCC) and National Bulk Handling Corporation(Warehousing

receipt financing).

Special interest concessions: Special interest concessions ranging from 1.5%

to 3.5% were extended to promote loan growth in high value agriculture

activities like horticulture, minor irrigation, seed processing, warehousing,

rural godowns, fishery, dairy, poultry, dealers in agri- inputs, farms

machinery etc.

Relaxed collateral security norms up to Rs1.00 lac for all agri loans and Rs

3.00 lac for loans with recovery tie up arrangements have been leveraged to

improve quality Agri-Business.

Bonding with Farmers :

During the year 209 new villages were adopted under “SBI Ka Apna Gaon

Scheme” for overall development taking the total to 1272. 373 new Farmer

Clubs were formed for fostering continued relationship with the farming

community taking the total to 10648.

39

REGIONAL RURAL BANKS :

Particulars Levels as on

31.03.2012 31.03.2013

No. of RRBs 18 15

States covered 16 15

Districts covered 129 138

Branches 3180 3380

Deposits (Rs in crores) 29491 33379

Advances (Rs in crores) 17833 20681

CD Ratio 60.47 61.95

Profit after tax (RS in

crores)

320 386

SBI has 15 sponsored RRBs, which operate in 138 districts of 15 states and

have a network of 3380 branches. During FY2012-13, 4 RRBs viz Sharda

Gramin Bank, Rewa Sidhi Gramin Bank, Nainital Almora Kshetriya Gramin

Bank and Rushikulya Gramin Bank, sponsored by othe commercial banks,

have amalgamated with SBI sponsored RRBs and three RRBs sponsored by

the Bank viz Parvatiya Gramin Bank, Samastipur Kshetriya Gramin Bank

and Vidisha Bhopal Kshetriya Gramin Bank have amalgamated with RRBs,

sponsored by other Banks. All the RRBs are operating on Core Banking

platform and are leveraging technology in electronic banking services such as

NEFT, RTGS, ATM linked KCC and ATM, to provide better customer

service. The RRBs are endeavouring to increase the size and business

volumes by implementing financial inclusion.

40

Rural Self Employment Training Institutes (RSETIs) :

Particulars 31.03.2012 31.03.2013

No. of RSETIs 106 111

States/UT covered 19 24

Persons trained 111049 143190

Persons settled 45285 56630

RSETIs offer free, unique and intensive short term residential self

employment training programmes with free food and accommodation,

designed specially to empower rural youth. Bank has set up 111 RAETIs

across the country. The SBI-RSETIs in aggregate conducted 5371 training

programmes, trained 143190 candidates and 56630 trainees are settled under

self employment/wages employment.

Other Highlight :

Under Prime Minister’s programme for the welfare of Minorities and

implementation of Sachar Committee recommendations, against GOI

stipulated target of 15% of the total priority sector lending (PSL) to Minority

Communities, the Bank has achieved a level of 16.77% of the total PSL.

The bank has opened 172 new branches in under-banked/unbanked areas in

Minority Community District (MCDs) taking the total number of such

branches to 3,438

41

CONCLUSION

Banking can be mysterious for consumers and how they interact with their finances

can be a complex matter. The challenges faced by banks and their customers are

many but the trick lies in de-mystifying complex financial relationships.

Technical solutions deployed by banks today are flexible, user-friendly and meant

to facilitate specific workflow and requirements in implementation processes. In

order to simplify lives, banks have begun to implement end-to-end technologies

through all departments with the intention of removing human error from

processes. Previously existing manual environments could not have been adequate

for future visions, growth plans and strategies.

In this day and age, customers enjoy complete luxury in terms of customized

technical solutions and banks use the same to cement long-term, mutually-

beneficial relationships. For a bank to succeed in adopting a CRM philosophy of

doing business, bank management must first understand CRM as a holistic concept

that involves multiple, interlocking disciplines, including market knowledge,

strategic planning, business process improvement, product design and pricing

analysis, technology implementation, human resources management, customer

retention, and sales management and training.

Turning the business strategy into actionable items is a difficult undertaking. For

which Customer Relationship Management works a magic wand.

42

BIBLIOGRAPHY

CRM in Banking and Insurance – Mrs.Shraddha M. Bhome.

Annual Report of SBI

en.wikipedia.org/wiki/Customer_relationship_management

http://www.techrepublic.com/resource-library/whitepapers/customer-

relationship-management-in-banking-sector

en.wikipedia.org/wiki/State_Bank_of_India